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Turnover at the major yearling sales was steady, but the market changed

  PICTURE: Edward Whitaker  

Why the stallion market faces transformation

THIS year's major European yearling sales surpassed all reasonable expectations. The turnover in sterling at the major sales organised by Tattersalls, Arqana and the Goffs/Doncaster group was, surprisingly, more or less the same asin 2008.

This is down by some 20 per cent from 2007 but if that is as far as the decline is going to go then, in Europe at least, the bloodstock recession looks like being a great deal less severe than the one which reached its low point in 1992.

In 1992 turnover at Europe's major yearling sales fell by 26 per cent and was down for the fifth year in succession with turnover falling by around 70 per cent from 1987 to 1992.

As the market recoveredduring the 1990s the stallion market underwent dramatic changes. To see how far things moved you only have to consider that in the mid 1990s there were more mares covered in England than in Ireland and only nine stallions covered more than 100 mares.

In 2008 64 flat stallions in England and Ireland covered more than 100 mares and throughout the boom years the market was split more or less 60-40 between Ireland and England.

The new recession is going to coincide with and accelerate a new transformation of the stallion market. Stallion owners in England and Ireland have been slow to come out with new fees for 2010 as they too are unsure about future trends and have been busily consulting with their clients. Many hadbeen reconsidering their strategy following the unexpectedly strong yearling sales.

Turnover at the yearling sales may have remained more or less stable overall but over the last 12 months the market has changed. From the moment the possibility of a severe recession appeared, in the bloodstock market as in so many others, there has been a flight to what is seen as safety, or at least at attempt to lower the risks involved in breeding for the market.

This means that the balance between proven and unproven sires has changed. In the boom years breeders and yearling buyers were happy to take risks on unproven sires as the upside could be so good.

Since the end of 2008 those still in the market haveless of an appetite for such risks and prefer going for proven sires. In 2008 about half of the 64 sires covering 100 mares or more had not yet had runners on the track and it is likely that when the figures for the 2009 covering season are published this proportion will have changed, not least because there were so few new sires in 2009.

At the yearling sales the balance between proven and unproven sires has changed as well. At the Tattersalls October sales 77 yearlings made 200,000gns or more, and only four of these were by sires who have not had runners; of the 192 yearlings which made more than 100,000gns fewer than 10 per cent were by new sires.

This change in the market would suggest that all those breeders who decided to go only to proven sires in 2009 had made the correct decision for the future, but it is not sure as there is also the question of overproduction.

Not only are there too many horses bred to sell but it could also be that there are too many yearlings on the market by each individual stallion, as well as the overall numbers.

The yearling sales which performed the best in 2009 were those which tightened their selection and reduced the numbers on offer. The best sales may have performed better than expected, but then it was harder than ever for breeders to get a place in one of the best sales.

Putting the argument another way, during the boom years nobody seemed to mind paying a lot of money for a stallion who was covering 150 mares or more as they knew that the best yearlings by these popular sires could make enough money to pay for those which did not make it into the top sales.

This is probably no longer the case when the top of the market has fallen as the number of buyers at six figures has reduced so significantly.

This leads on to the final factor shaping the stallion market, the competition between the Maktoumfamily and Coolmore. Commercial breeders have to keep these organisations' buying policies in mind when making matings and planning for the future.

Darley has spent a great deal of money on potential stallions over the last few years and the progeny of these new purchases are due to start going through the sales rings this December.

It might appear to be logical that the fees for proven stallions would stay much the same, while those for new and unproven sires continue to fall. There is , however, a real feeling that overproduction means overproduction at every level and there are too many commercial yearlings being raised which cost £75,000 or more to produce.

If the fees for proven sires are going to remain the same many breeders will be asking how many of their progeny will be on the market in 2012 before deciding whether or not it is a low risk strategy to use these horses.

At the same time some of the new siresfrom Darley, Coolmore and other farms are going to be a big success and those who use these sires at reduced fees could find themselves with few risks when it comes to the 2012 sales.






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